Sugar Annual 2012

An Expert's View about Tropical and Subtropical Fruits, Sugar Cane in Australia

Posted on: 22 Apr 2012

The Australian sugar cane industry is expected to continue to grow, supported by increased cane crush.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 4/12/2012 GAIN Report Number: AS1208 Australia Sugar Annual 2012 Approved By: Joseph Carroll, Agricultural Counselor Prepared By: Mike Darby , Agricultural Specialist Report Highlights: Following an almost decade-long cycle of extreme weather events, the Australian sugar cane industry is expected to continue to grow, supported by increased cane crush and improved commercial cane sugar (CCS) content. Total sugar production in 2012/13 is forecast to increase sharply to 4.5 MMT (IPS), the highest level of production since 2008/09. Sugar exports in 2012/13 are forecast to increase to 3.0 MMT. Executive Summary: The Australian sugar cane industry is forecast to continue growing its productive capacity following the almost decade-long cycle of extreme weather events (including record breaking droughts followed by cyclones and flooding). The production and export of sugar are expected to increase sharply in 2012/13. Industry sources expect these increases to continue beyond the forecast period and into 2013/14. While sugar prices are expected to fall somewhat in 2012/13, they are expected to remain at levels considered historically high. Area planted to cane is expected to steadily increase in response to above-average sugar prices and a decline in competition from industries which compete for land (e.g., planted timber). Source: ABARES Data A return to ?more normal? weather conditions combined with historically high prices, will likely see an increase in planted area, yield, production and exports. Over the longer term, total productivity will likely increase to levels more reflective of the longer- term-average. However, planted area or production records are not expected to be broken as some key challenges remain for the cane sugar industry. Commodities: Sugar Cane for Centrifugal Sugar, Centrifugal Total Cane Area (cut for crushing) Total cane area cut for crushing in 2012/13 is forecast at 380,000 hectares, the highest level since 2009/10. Improved profitability and climatic conditions are expected to see areas moved back into cane production from other land uses. A decline in the competitiveness in industries which compete for land area, such as planted timber, will likely make available more land for growing sugar cane. The total area to be cut for crushing in 2011/12 is estimated at 366,000 hectares, in-line with industry estimates. The revised estimate is lower than the area previously reported by Post as the recovery from cyclones and severe flooding is taking longer than previously anticipated. Industry sources suggest that up to 60,000 hectares were taken out of production following the severe weather events of 2009/10 and 2010/11. Source: ABARES Data Area planted to sugar cane is anticipated to continue to increase beyond the forecast period and according to industry sources could reach as high as 400,000 hectares over the long-term. Despite this increase, this figure remains well below the record area of 448,000 hectares achieved in 2002/03. Sugar Cane Production Total sugar cane production for 2012/13 is forecast at 31.0 MMT, up significantly on the revised estimate for the previous year. A projected increase in harvested area coupled with improved cane yield is expected to support the increase. Source: ABARES Data Sugar cane production for 2011/12 is estimated at 28.0 MMT, down significantly from Post?s previous report. Lower than expected harvested area and a poorer cane yield per hectare, due to extreme weather events, caused a downward revision in total cane production. Sugar Production Total sugar production in 2012/13 is forecast to increase sharply to 4.5 MMT (IPS), roughly equal to around 4.34 MMT of sugar in typical raw form. If achieved, this would be considered the highest level of production since 2008/09. An increased cane crush coupled with improved commercial cane sugar (CCS) content is likely to see sugar production increase significantly. Source: ABARES Data An average commercial cane sugar (CCS) content of 14.5 percent has been assumed, representing an increase on the 13.9 percent estimated for the previous year. A return to more normal weather conditions is expected to see CCS content improve significantly. Total sugar production in 2011/12 has been revised downwards to 3.9 MMT. Extreme weather events, such as cyclones, greatly reduced the cane crush as well as reduced CCS content. Exports Total exports are forecast to increase to 3.0 MMT in 2012/13. Increased production and relatively strong export demand are expected to see exports increase. The strong Australian dollar is however, expected to present a constraint to higher exports and contribute to higher ending stocks. Total exports for 2011/12 have been revised downwards slightly to 2.80 MMT, as lower than expected production has reduced the supply of sugar available for export. Imports Imports for 2012/13 are forecast at 165,000 MT. The estimate for total imports of sugar for 2011/12 has been revised upwards to 180,000 MT, which could well be a record level of imports. This increase is primarily driven by an increase in bulk sugar imports. Media reports purport that in 2011/12 bulk sugar was imported from Thailand in response to a temporary shortage. Despite this increase in imports, total imports continue to be small compared with total production. AUSTRALIA IMPORTS RAW SUGAR Approximately 40,000 tonnes of raw sugar is believed to be imported in April 2012 from Thailand into Mackay to increase declining stores. Industry sources report that Mackay?s sugar industry had its worst year on record, losing up to $80 million in revenue due to extraordinary rainfall forcing farmers to leave 1.4million tones of cane unharvested. Due to extended wet weather conditions last season the harvest could not be completed and not enough sugar was stored to meet the requirements through to the next crush. Source: Daily Mercury: April 6, 2012 Production, Supply and Demand Data Statistics: Sugar Cane for Centrifugal 2010/2011 2011/2012 2012/2013 Market Year Begin: Jul 2010 Market Year Begin: Jul 2011 Market Year Begin: Jul 2012 Australia USDA Official New Post USDA Official New Post USDA Official New Post Area Planted 0 0 0 0 Area Harvested 390 330 366 380 Production 32,000 26,000 28,000 31,000 Total Supply 32,000 26,000 28,000 31,000 Utilization for Sugar 32,000 26,000 28,000 31,000 Utilizatn for Alcohol 0 0 0 0 Total Utilization 32,000 26,000 28,000 31,000 1000 HA, 1000 MT Sugar, Centrifugal 2010/2011 2011/2012 2012/2013 A Market Year Begin: Jul 2010 Market Year Begin: Jul 2011 Market Year Begin: Jul 2012 ustralia USDA Official New Post USDA Official New Post USDA Official New Post Beginning Stocks 413 413 193 193 73 Beet Sugar Production 0 0 0 0 0 Cane Sugar Production 3,700 3,700 4,150 3,900 4,500 Total Sugar Production 3,700 3,700 4,150 3,900 4,500 Raw Imports 16 16 18 40 20 Refined Imp.(Raw Val) 147 147 147 140 140 Total Imports 163 163 165 180 165 Total Supply 4,276 4,276 4,508 4,273 4,738 Raw Exports 2,550 2,550 2,750 2,650 2,800 Refined Exp.(Raw Val) 200 200 200 200 200 Total Exports 2,750 2,750 2,950 2,850 3,000 Human Dom. Consumption 1,333 1,333 1,250 1,350 1,375 Other Disappearance 0 0 0 0 0 Total Use 1,333 1,333 1,250 1,350 1,375 Ending Stocks 193 193 308 73 363 Total Distribution 4,276 4,276 4,508 4,273 4,738 1000 MT Recent Reports from FAS/Canberra The reports listed below can all be downloaded from the FAS website at: http://gain.fas.usda.gov/Lists/Advanced%20Search/AllItems.aspx. Title of Report Date Cotton and Products Annual 2012 12/03/29 Grain and Feed Annual 2012 12/02/20 Wine Annual 2012 12/03/15 Livestock and Product Semi-annual 2012 12/03/13 Grain & Feed Lock-Up ? February 2012 12/01/24 Citrus Annual 2011 11/12/07 Grain and Feed Update ? November 2011 11/01/11 Dairy Annual 2011 10/14/11 Sugar Semi Annual 2011 09/16/11 Livestock and Products Annual 2011 08/31/11 FAIRS Country Report 08/17/11 Stone Fruit Annual 2011 08/11/11 US Cherries Break Through Quarantine Barrier into Western Australia 07/19/11
Posted: 22 April 2012

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